But for all the billions the two companies have committed to differentiating themselves from each other, they are increasingly following similar business strategies, analysts say. And that might not be a bad thing for the satellite radio business, which while growing rapidly, has so far attracted only a tiny portion of the 193 million people market research firm NDP Group estimates listen to traditional radio. Satellite radio subscribers pay a monthly fee to receive more than 100 channels, including music, news, talk and sports.

Analysts expect XM and Sirius to generate enough revenue to cover the cost of their operations in the next two years. But as the two companies move into the home, laptop and personal music player, they are vying for consumers' attention with podcasts, online radio and downloaded music. Which prompts the question: Will satellite radio's audience be eroded by whiz-bang gadgets before the industry escapes the red?

A recent NPD Group survey found that more people still listen to downloaded music than satellite radio. But the satellite radio audience is likely to grow as deals the two companies have made with automakers start to generate a critical mass. April Horace, an analyst for Hoefer & Arnett Inc., estimates the total number of satellite radio subscribers will reach 20 million in five years.

So far, so good. D.C.-based XM, for example, reported yesterday that its second-quarter loss narrowed and revenue more than doubled. It added 647,226 subscribers during the quarter and expects to hit 6 million by year's end. Sirius, based in New York, will report earnings Aug. 2.

XM remains dominant, thanks to an edge in technology that dates back to 2002, when XM launched its service -- a year earlier than Sirius. That lead has helped XM attract 4.4 million subscribers, compared with 1.5 million for Sirius. The differences between the two companies may not remain stark for long. The same outfit now manufactures microchips for both companies. The two companies now charge subscribers the same monthly fee -- $12.95. And to the average consumer strolling down the aisle at Best Buy, "the products being offered are not a ton different from either company," said Jason Helfstein, an analyst with CIBC World Markets.

"The biggest differences today are in technology and content. Both advantages will start to disappear over time," Helfstein said. "They're both going in the same direction."

XM and Sirius are still betting that most of their customers will tune in when they're behind the wheel. The technology of satellite radio "is designed for vehicles," said Jim Collins, a Sirius spokesman who cites the same figures as analysts: There are 220 million cars on the road today and 16 million to 17 million new cars sold each year.

By now, most of the major automakers are committed to offering one service or both, but it will be at least five years before automobile sales will be the primary source of new subscriptions, Helfstein said. XM now draws half its subscribers from the auto market and half from the retail market, said spokesman David Butler. Sirius draws more of its subscribers from the retail side, Collins said.

While they wait for subscriptions to pick up among drivers, the two companies want to expose more people to satellite radio when they're at home, shopping or online. Lately, this strategy has led to big-name partnerships such as Sirius's announcement in June that it would provide content to Sprint cell phones. Last week, XM and Samsung Electronics Co. said they plan to introduce a digital music player with satellite radio in time for the holiday shopping season. The device will work in conjunction with an online music store exclusively for XM subscribers hosted by Napster. Sirius is hoping to offer a digital music player with satellite radio by then, too, Kit Spring, an analyst at Stifel, Nicolaus and Co., said in a July 26 research note.

The next frontier is likely video, said Sean P. Butson, a Legg Mason analyst. For months, Sirius officials have said they plan to offer video service, most likely for kids in the back seat, starting next year. Analysts expect XM to make use of broadcast spectrum it agreed to acquire earlier this month for video and more data services. Butson said the two companies could spend 2006 vying for the favors of SpongeBob SquarePants.

XM reported second-quarter revenue of $125.5 million, compared with $53 million for the comparable period a year earlier. The company had a loss of $146.6 million (70 cents per share), compared with $166 million (84 cents ) for the second quarter of 2004.